By Michael Baxter

There is a just a hint of good news for supporters of the English football team. In fact it could be construed as good news for the supporters of every national football team, except one: Spain. But as far as the economy is concerned the news is not so promising.

Next month the Spanish region of Catalonia is to hold an election, and it is being presented as a referendum on independence. It is too soon to say how the vote will turn out, and whether the eventual result will indeed be a break-up of Spain, but there is something tragically ironic about this affair. After all, the euro was meant to be a kind of guarantee of peace in Europe, of unity. The reality is that it may be achieving the precise opposite.

The German football team may benefit from a break-up of Spain – at least one assumes that some of the footballers who make up Spain’s superb side come from Catalonia – so if the country breaks-up, its national team will be weaker. But for Germany as a whole, this is yet another example of how policies it is pursuing may ultimately cause the occurrence of the one thing it fears more than anything else.

Sticking with the football analogy, the problem in a nut shell is that it is not possible for all teams in the Premiership, or Serie A, or la Liga or Bundesliga, to win all their matches. It is a mathematical impossibility. Alas, it is not possible for every country to export more than it imports. And as far as growth is concerned, it is not possible for every country to impose austerity, and secure growth; indeed it may be the case that growth cannot occur if all people across the world start saving more.

There is a way forward for the euro, but before we turn to that, let’s try to drill down into the strife at the heart of the Europe.

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